WASHINGTON – After veering away at the last minute from a fiscal cliff over federal spending Congress and the White House appear to be racing toward another economic precipice, this one dealing with the nation’s debt limit.

According to outgoing Treasury Secretary Tim Geithner, the federal government hit its debt limit – the amount of money the Treasury can permissibly borrow to fund governmental functions – on Dec. 26, 2012. The Treasury has taken steps to avoid immediate shortfalls but the federal government could soon find itself in default of its obligations if the ceiling, set at $16.4 trillion, isn’t raised.

“Our numbers show that we have less time to solve this problem than many realize,” said Steve Bell, senior director of the Economic Policy Project at the Bipartisan Policy Center. “We estimate that Treasury will exhaust its borrowing authority and no longer have sufficient funds to meet its obligations in full and on time at some point between February 15 and March 1. It will be difficult for Treasury to get beyond the March 1 date in our judgment.”

President Obama tussled with congressional Republicans over the most recent debt limit increase during the summer of 2011, ultimately resulting in the Budget Control Act of 2011, which not only raised the ceiling but cut scheduled government spending increases. On Aug. 5, 2011, four days after the legislation became law, Standard & Poor’s downgraded the federal government’s credit rating for the first time in history, lowering it from AAA to AA+, a move essentially making it more expensive to borrow money.

The General Accounting Office, in a report issued last July, found that the congressional delay in approving the 2011 debt ceiling hike cost the Treasury $1.3 billion.

“Congress usually votes on increasing the debt limit after fiscal policy decisions affecting federal borrowing have begun to take effect,” the report found. “This approach to raising the debt limit does not facilitate debate over specific tax or spending proposals and their effect on debt.”

Congress, the GAO said, “should consider ways to better link decisions about the debt limit with decisions about spending and revenue to avoid potential disruptions to the Treasury market and to help inform the fiscal policy debate in a timely way.”

This go-round, with congressional Republicans again insisting on spending concessions before approving any increase, the president has vowed that he will not engage lawmakers over the limit, asserting at a news conference on Jan. 14 that he refuses to negotiate “with a gun at the head of the American people.”

“It would be a self-inflicted wound on the economy,” he said. “Even entertaining the idea of this happening, of the United States of America not paying its bills, is irresponsible. It’s absurd.”

Republican leaders have not backed down. Some lawmakers are demanding budget cuts equal to the amount of the debt limit increase.

“The American people do not support raising the debt ceiling without reducing government spending at the same time,” said House Speaker John Boehner (R-Ohio). “The consequences of failing to increase the debt ceiling are real but so too are the consequences of allowing our spending problem to go unresolved. Without meaningful action the debt will continue to act as an anchor on our economy, costing American jobs and endangering our children’s future.”

So how will this play out? There exist several potential scenarios:

DEFAULT

Opinions differ on what might happen in the immediate aftermath if Congress refuses to act and the Obama administration finds its hands tied. The U.S. defaulting on its debts is uncharted territory. One analysis finds that the Treasury will collect $277 billion in revenue between Feb. 15 and March 15 and face $452 billion in scheduled payments. That means about $175 billion in obligations – 39 percent of the government’s tab — will go unpaid.

Geithner acknowledged Internal Revenue Service refunds, Medicare, Medicaid, Social Security, and interest payments could be affected.

“If we reach the X Date and Treasury is forced to prioritize payments, handling payments for many important and popular programs will quickly become impossible, causing disruption to an already fragile economic recovery,” Bell said.

The Bipartisan Policy Center acknowledges the Treasury may try to prioritize some payments over others but the department could find it has neither the legal authority nor the technical capacity to do so. More likely, it maintains, the Treasury will collect sufficient revenue to make an entire day’s worth of payments at a time — meaning all payments would be made in turn but everyone anticipating funds from the government would experience delays.

Problems don’t end there. In the month following the start of any default about $500 billion in debt is expected to mature. Normally, the Center said, this would be rolled over by issuing new debt, an avenue rendered unavailable sans a debt limit increase.

Those issues could seem inconsequential compared to the anticipated reaction of the financial markets if the limit is not raised. Investors are expected to dump Treasury bills, pumping up interest rates and leading to inflation. The stock market could panic, leading to a sell-off with an impact felt near and far.

But J.D. Foster, a senior fellow in the Economics of Fiscal Policy at The Heritage Foundation, argues that the only way the federal government would default on its debt is if the Treasury opts to do so. There is sufficient money entering the system to meet debt service if no agreement is reached although such a move likely would result in a partial government shutdown

“This means certain governmental functions are suspended because the Treasury lacks the authority to spend — not because it lacks the means to spend,” Foster said. “Further, a government shutdown applies primarily to those activities funded by what is called ‘discretionary’ spending, essentially the day-to-day operations of the government, as opposed to entitlement spending such as Social Security and Medicare.”

Foster expressed confidence the Treasury will “take the actions necessary to preserve the full faith and credit of the U.S. government and avoid defaulting on debts due.”

The Obama administration anticipates governmental spending would have to be cut by 40 percent under the package described by Foster. Sen. John Cornyn (R-Texas), in an op-ed piece for the Houston Chronicle, asserted that “it may be necessary to partially shut down the government in order to secure the long-term fiscal well-being of our country, rather than plod along the path of Greece, Italy and Spain.”

Cornyn said Republicans “are more determined than ever” to implement spending cuts and restructure entitlement programs to secure the nation’s long-term integrity.

“If we don’t reduce spending and reform our three biggest entitlement programs – Medicare, Medicaid and Social Security – then we will strangle economic growth, destroy jobs and reduce our standard of living,” he said.

Obama said that outline carries dire consequences.

“If congressional Republicans refuse to pay America’s bills on time, Social Security checks and veterans’ benefits will be delayed,” Obama said. “We might not be able to pay our troops or honor our contracts with small-business owners. Food inspectors, air traffic controllers, specialists who track down loose nuclear materials wouldn’t get their paychecks. Investors around the world will ask if the United States of America is in fact a safe bet. Markets could go haywire. Interest rates would spike for anybody who borrows money, every homeowner with a mortgage, every student with a college loan, every small business owner who wants to grow and hire. It would be a self-inflicted wound on the economy. It would slow down our growth, might tip us into recession, and ironically, would probably increase our deficit.”

AGREEMENT

The Obama White House and Congress have peered into the abyss before and arrived at solutions, although most proved no more than temporary. Congress balked at raising the debt limit to $16.4 trillion in August 2011 and demanded budget cuts to attract support. The administration and congressional leaders finally settled on $917 billion in cuts over 10 years in exchange for a $900 billion hike in the debt limit. Spending under the deal therefore was cut deeper than the increase in the debt limit.

This time, Republicans, who control the House, are seeking a reported $1.2 trillion in budget cuts in exchange for raising the debt limit. Obama insists he’s not going to play the GOP’s game, stressing that lawmakers “will not collect a ransom in exchange for not crashing the American economy.”

“Raising the debt ceiling does not authorize more spending — it simply allows the country to pay for spending that Congress has already committed to,” Obama said. “These are bills that have already been racked up and we need to pay them. So while I’m willing to compromise and find common ground over how to reduce our deficits, America cannot afford another debate with this Congress about whether or not they should pay the bills they’ve already racked up.”

Republicans remain equally adamant. Senate Republican Leader Mitch McConnell, of Kentucky, has vowed to include budget cuts in the discussions.

“Avoiding this problem will only make it worse, which is why many of us view the upcoming debt limit debate as a perfect opportunity to face up to Washington’s spending,” McConnell said.

UNILATERAL ACTION

In a recent letter to Obama, four high-ranking Senate Democrats, led by Senate Democratic Leader Harry Reid, of Nevada, urged him to, if necessary, raise the debt ceiling without congressional approval.

“In the event that Republicans make good on their threat by failing to act, or by moving unilaterally to pass a debt limit extension as part of an unbalanced or unreasonable legislation, we believe you must be willing to take any lawful steps to ensure that America does not break its promise and trigger a global economic crisis — without Congressional approval, if necessary,” the group advised.

Lawmakers supporting unilateral presidential action cite the 14th Amendment to the Constitution, which says in part, “the validity of the public debt of the United States, authorized by law, shall not be questioned.” But Republican lawmakers insist any such effort would be unconstitutional, noting that the framers granted the power of the purse to Congress.

“Democrats in Washington are falling all over themselves in an effort to do anything they can to get around the law — and to avoid taking any responsibility for Washington’s out-of-control spending,” McConnell said.

The White House has said it does not plan to invoke the 14th Amendment.

TRILLION DOLLAR COIN

During the 2011 debt limit showdown, John Balkin, a professor of constitutional law and the First Amendment at Yale Law School, used his blog, Balkinization, to offer a unique way out of the mess.

A loophole in federal law allows the government to mint platinum coins in any denomination it chooses. Balkin suggested, whimsically at first, that the U.S. Mint simply produce a couple platinum coins with a value of $1 trillion each, which would be legal tender. The Mint would deposit the coins in its account at the Federal Reserve. The president could then direct the Federal Reserve to transfer the money to the Treasury. The government could then afford to pay its bills without relying on Congress to raise the debt limit. And since the money would only be used to maintain federal spending at existing levels, inflation wouldn’t be a problem.

Republicans dismissed the proposal as a gimmick.

“Rather than offering any plan to break the spending habit that’s causing the problem, Democrats are looking at everything from the ridiculous — printing a trillion-dollar coin — to outright abdication of Congressional responsibility,” McConnell said.

The Treasury has put the kibosh on the proposal, claiming the law was intended to produce platinum coins as a substitute for raising the debt limit.

“There are only two options to deal with the debt limit — Congress can pay its bills or it can fail to act and put the nation into default,” said White House Press Secretary Jay Carney.

68 Comments, 23 Threads

1.
Joshua Scholar

I heard on NPR that last time the Treasury Dept. said that it doesn’t have the authority to prioritize payments. It is only allowed to pay accounts in the order they came due / first in, first out. One could see why that would be the law, since it was never expected that the government would refuse to pay its debts and we want to make sure that no one is made to wait for political reasons.

If the Treasury can’t prioritize accounts, then we DO face the prospect of defaulting on interest and principle on our bonds and we do face the prospect of utterly ruining our economy permanently. If the interest on our debts raise, due to not being such a good risk, then interest payments will swamp us and break us for eternity.

Also the world economy will collapse until a replacement for the US is found. Perhaps China will become the world’s lead economy. What an irony it will be if future history books read that capitalism was destroyed by the Tea Party.

Someone should tell NPR that the government already prioritizes its spending. Each time this comes up we see stories about the government shifting accounts and holding off paying different groups as a means to keep everything going until an agreement is reached. This happened just a few weeks back.

I heard on NPR that last time the Treasury Dept. said that it doesn’t have the authority to prioritize payments. It is only allowed to pay accounts in the order they came due / first in, first out. One could see why that would be the law, since it was never expected that the government would refuse to pay its debts and we want to make sure that no one is made to wait for political reasons.

If the Treasury can’t prioritize accounts, then we DO face the prospect of defaulting on interest and principle on our bonds and we do face the prospect of utterly ruining our economy permanently. If the interest on our debts raise, due to not being such a good risk, then interest payments will swamp us and break us for eternity.

Also the world economy will collapse until a replacement for the US is found. Perhaps China will become the world’s lead economy. What an irony it will be if future history books read that capitalism was destroyed by the Tea Party.

IF, big IF, that is what Treasury really said, it is at best a disingenuous statement. Treasury doesn’t pay all the government’s bills; it pays its own which include its operating costs and the debt service. The government’s other bills are paid by the operating entity which incurs the bill and a federal officer at some level of the organization, what level is determined by the kind of bill, has to certify that there is a funded appropriation to support any payment that it makes. It is actually a crime for a federal fund manager to authorize a payment for which there is not a funded appropriation.

Were the US to reach its debt limit, at some point there would not be funds to support some appropriations. Some combination of Treasury and OMB, at the direction of the White House, would make the determination as to which appropriations can or cannot be funded and to what level appropriations can be funded. It is an executive decision as to how that is done. If the communist SOB you fools elected wants to do maximum damage, he can say that since he lacks the revenue to support 100% of all the appropriations, he will default on all the governments obligations rather than decide only to delay or default on some, he can, and from what we know of him, he might very well do that, but it is a lie.

An intelligent administration that had the interest of the Country in its mind, would simply make the determination as to which appropriations and obligations it would consider funding and which not. Since it is winter and there isn’t much construction going on, the OMB could tell the secretaries that appropriations for construction by both the federal government itself and pass-throughs to the states were not adequately funded and therefore no federal officer was authorized to expend funds. This kind of expenditure prioritization can go down in detail to specific programs, projects, offices, or even positions. OMB could tell Treasury that it had authorization for its debt service obligations but no authorization for some percentage of its operating costs, which would result in some activity being curtailed because a federal officer would not be able to support an expense with an authorized and funded appropriation.

This is really quite a simple business that the communists are catastrophizing for political purposes. Every other level of government does this sort of thing all the time and other administratrations have done it without drama when appropriations were delayed or when expected appropriations don’t materialize or are reduced. It is really rather routine for governments at all levels, including the federal government, to give layoff or furlough notices to many of their employees as the end of a fiscal year approaches and a new budget hasn’t yet been appropriated and authorized. Grantees get notified that they can only draw down 60% of the funding, contractors get told that they can only perform 40% of the work or cannot start work until a later date or until there is a specific authorization. Employees get laid off or furloughed. Vacant positions don’t get filled. This stuff is routine.

I don’t want to “talk,” I just respond to your disinformation. Talking to lefties is like trying to teach a pig to sing; it frustrates me and irritates the pig.

The political dynamics are all of the administration’s making. The Obamunists and the Democrat lackeys in the Senate have played the brinksmanship/government shut down game for four years now, all with CRs, all with whatever profligate spending the Democrats wanted. Now the profligate spending requires another debt limit increase. As I set out below, the fight needs to be picked on the budget itself and it needs to be done now, not in the months leading up to the mid-term.

It is not a matter of deciding which debts to pay or not pay. First you pay legal obligations then you have to trim back ongoing expenses to match the balance of your income. (you or your family may have done that).

There are a number of areas to look at lay-off workers, stop certain programs, sell of assets not needed. If the Obama care regulation writer got laid off that would stop other wasteful spending. Then simply layoff the whole Department of Energy and stop pay to play “grants”. Wipe out the part of the weather service dealing with planning for the Hoax of Global Warming. Why send money on planning for something clearly not going to happen. Finally abolish the Department of Education that clearly is a state local function.

Then auction off vast tracts of land we are not using.

If we still are not living within our means Obama will need to take one action a year and Hilliary’s successor can pick up the phone rather then fly around the world.

The enemy within.We have already been taken over by the stealth workings and whisperings of those Un-American forces who have this President’s ear! A president is a position more nimble than the senate or the house and obama’s puppeteers are using that to great success.Our vacation president doesn’t have the necessary life experience to run this casino game on his own.Who is willing to pull the sandwich away from the poor mans mouth or the joint from his pocket,The very foundation of our problem.Must we wait for the Galapagos Turtle that is the Supreme Court to save us? Dare i mention the military?

This is all meaningless because the cuts aren’t real. What they are fighting about is reductions in the rate of spending growth NOT cutting spending in real terms. For the welfare and other social programs, annual spending increases are already factored in meaning no vote is necessary to increase the amount of spending. Additional programs and higher than programmed spending can be added though.

So even if $917 billion in “cuts” are agreed upon, spending will still increase by more than that naturally. Besides that, $900 billion sound like a lot, but it is over 10 years which makes it less than a drop in the bucket.

If they want to be taken seriously, they will have to drop the automatic spending increases and talk about real, baseline cuts. Never happen though since that would cost them votes. Can’t upset the eaters at the trough.

The federal government receives enough tax receipts every month to meet its obligations. What it doesn’t receive, and what is made up with via borrowing, is enough money to pay for its desires.

If we don’t raise the debt ceiling we’re still obligated to pay interest on the debt frost, about 6% of tax receipts. Then we have to pay Social Security, Medicare, the military, and certain other security obligations. We do NOT have to fund green energy, welfare, food stamps, ethanol, the EPA, the Dept. of Education, Interior, et al.

If the GOP merely refused to raise the credit card limit the federal government would be forced to cut spending immediately and would only be able to send what it actually receives in taxes. The GOP could get spending cuts simply by doing nothing.

If we are taking in MORE than our debt service, then we won’t default. Our legally obligated debt. Social security, medicare, the military, govt workers salaries, welfare, grants for studying the mating habits of chimps are NOT debt.

Now why should Congress poke their noses back into the financial business of the Nation when back in 1913 they gave all of this financial power to a Privately Owned Closed Corporation called the Federal Reserve System. Would not that be moving backwards for our Republic.
Does anyone think that the Fed hasn’t done a great job with our money and wealth?
Ahh, yes. The International Banking Cartel is doing great.
Everytime there is a gain in prosperity they get richer and everytime there is a downturn in the economy the taxpayers of the U.S. eat the bill by paying more taxes due to the inflation of the money supply. The bankers gain wealth, the citizens pay the bill.
Such a wonderful scheme dreamed up by Rotheschild and implemented by Senator Nelson Aldrich, D, RI, the grandfather of Nelson Aldrich Rockefeller.

Intensely partisan rhetoric going down to the wire ending with the GOP bent over with dropped trow raising the debt limit by $2T in exchange for O’s promise to take up entitlement reform this summer. Boner will weep in the press conference congratulating themselves on finally making O address spending reforms. Focus will shift to immigration, entitlement reform dies on the vine.

I know people in the Social Security system like to believe that you paid for it and are thus entitled to the benefit, but the reality is that many recipients and potential recipients have paid nothing at all and most have paid nothing like what they will ultimately take out.

It is easy to get a good rant here about those awful underfunded public employee pension systems and some of them are truly awful and hopelessly underfunded, but the ultimate underfunded system is Social Security; it has no funding beyond current receipts. The program has been larded up with survivor benefits and disability benefits to people who haven’t contributed at all. The contribution rates required of both employees and employers have been woefully inadequate to sustain the program. And worst of all, the Congress did away with all pretense of fiduciarily sound fund maintained as an investment account on behalf of the contributors, but rather turned it into a paper system of IOUs from the government to the Social Security system, thus requiring the benefits be sustained from the revenue stream of contributions and at sometime redeeming the IOUs from the treasury with general revenue. It is simply a Ponzi scheme that is rapidly running out of contributors.

Also, there are probably tens of thousands of “double-dippers” getting disability from the VA (service connected) and again from SS for the exact same disability. The Feds could save a bundle by making them choose one or the other.

Our interest payments on debt exceed $400b a year. Our defense spending this year will be just under $700b. That leaves over $2t we spend on entitlements and discretionary spending. Our interest payments are quickly closing in on defense spending levels. That is not something we can sustain.

What do you want Medicare or interest payments?

Interest payments represent a negative money multiplier effect of 2:1. For each dollar spent on interest payments, it is a dollar sucked out of the private sector and a dollar that government can’t spend on other programs.

If you really like Social Security, you should be arguing for our government to get spending levels down so that our debt payments don’t suck up all the money we would otherwise spend on Social Security. Cuts to social security wont take place because Republicans want to kill old people, they will take place because our government wont have any money. The party responsible for spending all the money is not the Republicans.

The House should not make any deals with the devil, Obama. Reagan tried it, and lost. HW Bush tried it and lost. Newt Gingrich tried it and lost. When a democrat is wanting to make a deal, he is going to screw you in the end. They have no honor. Every word they say is a lie, and anyone who deals with them is a fool, their promise is claptrap and they are patently dishonest at every turn.
This entire financial mess we are now in was brought on by Jimmie Carter and the CRA of 1977 where the S adn Ls were targeted for financial ruin. This brought us 20% mortgage rates in the late 70s and early 80s. Reagan and Bush cleaned up this fiancial mess.
Clinton made a deal with Newt in the early 90s for entitlement reform and in the background he was changing the CRA to target national banking. This brought us the Mortgage Housing Bubble of the 90s with severe loan problems. Clinton then did the Modernization Acts for both Banking and Securities which gave rise to Mortgage Dirivities which finally crashed the entire economy of the world in 2008 because all of the world bought into these supposedly secure NINJA investments. When the millions of people with No Income, No Job and no Assets could not meet their mortgages and went into default everything went to he##.
And here we are today.
Once again the Fed is buying 80 billion dollars of bad mortgages per month as if they are Fannie and Freddie. Does it matter who is on the hook, it still comes down the the Taxpayer sooner or later. Soon we will have another Mortgage Bubble only this time the world is not on the hook — we are on the hook, we the citizens of this nation are once again going to be screwed by our political cronies….. Get ready and get greased….

I talked to a friend from Spain last week. Unemployment is at 26% and rising. They only have revenue to pay interest on the debt.
Last night I spoke with another friend from Argentina. I asked him about Kirschner and the Falklands. He said its just sabre-rattling because the economy is crashing.
Coming to a country near you soon.

Very true. I lived in Buenos Aires for years. Obama and the Kirchners have followed every step that Peron took which resulted in crashing a rich nation into dust for decades.
- In exchange for union votes from the ‘middle class’, Peron and Kirchners pandered to unions. Any jobs were then set aside for unions and members only, with generous benefits, healthcare and pensions.(Obama stimulus and TARP: union only, GM gift to unions)
- a propaganda blitz against the Rich,
- To pay for the rising costs, gov then took over and nationalized companies. The excuse is always that the companies and top 1%ers are taking the country’s national resources. Therefore, it should belong to all citizens. Once the gov takes over running the businesses, they all fail. The remaining business fled.
- After nothing was left, Gov went after private retiremnet accounts, private pensions, bank, savings accounts.
- When this ran out, Gov nationalized banks, private property and family businesses for “the good of all” and shut down business competing against big donors,
- taxes were raised to pay for the expensive contracts to best friends and cronies. The raised taxes actually brought in less revenues.
- pay bills by gross printing and inflation devaluation of currency.

The skyrocketing debt and deficit spending quickly crushed the country. Argentina found a negative export and less cash flow when the products were too expensive due to the higher labor costs and taxes.

After several years of lying about inflation rates to keep debt payments low, hyperinflation kicked in, Argentina was unable to pay its foreign debt nor even its own operating expenses.Imagine the price of bread going from $.79 to $5.00, or gas nesecarily going from $2.00 to $5.00 in one afternoon. My Argentine friends and ex-soviet iron curtain are ahgast at what this admin in doing.

Libs never get it right and always collapse and destroy. They always ignore the very apparent disaster in exchange for short term give-me. Since public housing was such as huge success, thats where we all will live or under bridges built from the sale of our homes.

The only time Keynesian has worked was when Reagan gave huge gov influx of money to all people by lowering taxes and paying gov bills.

there’s other options – no debt limit increase, introduce a bill to immediately shut down EPA. If the savings aren’t enough, introduce a bill to immediately shut down Dept of Ed. Of course, another option is to introduce a bill to delete any and all funding for anything not specifically authorized by the Constitution. Ha.

I like the idea of tying the debt limit increase to getting a budget out of the Senate. Force the Dems to come out from behind over three years of illegally not producing one. Then we’ll all be able to see where all the money is going. We all know the debt limit will be increased – the question is what can be gained in the negotiation.

There is a reason why Republicans cave and Obama wins. The good citizens of the USA will not tolerate spending cuts. The R’s are on the wrong side of the polls and like a swimmer caught in a riptide their choices are to go along with the current (ie raise the debt ceiling, no strings attached) or drown in 2014.

The debt limit is not the “hill to die on,” because die they will; Obama has all the cards. First, the meme that Congress must step up and allow Comrade Obama to pay the bills is compelling; they did after all pass the CRs that now require borrowing to support. Second, Obama is no Bill Clinton. When Clinton stared down Gingrich and got him to blink with the government shutdown, it was really a virtual shutdown and no real harm was done to anyone other than Republican Congressional Leadership; Obama will make it hurt! Obama WILL push granny over the cliff and he will stand there pointing at John Boehner as she goes over. He WILL refuse to make military payroll because he doesn’t much like them anyway and they didn’t much vote for him. He WILL refuse to make debt service payments because he knows that will produce the maximum threat to US markets and thus the maximum pressure on the Congress. A much stronger Republican leadership collapsed in mere days from the pressure of a virtual shutdown along the lines of a public employee union’s rolling stikes augmented by media manipulation and the Republican brand and Republican governance at the federal level has never recovered from it. A real shutdown in which real people sustain real harm is unrecoverable even this early in the election cycle.

This battle cannot be won with the Executive Branch because the President has all the power to, first, manipulate the media and, second, to decide who to hurt; rest assured he won’t hurt anyone that supports him unless the thing gets totally out of hand or he is even more ruthless than I think he is. The truly ruthless play is to make those EBT cards not recharge and start helter-skelter; don’t know that we’re there yet.

If the fight is to be made, and I think it must, and soon, it must be with the Democrats in the Senate over CRs and a budget; enough of the people understand pork-laden appropriations and crony spending. I don’t believe the Republicans have the guts, skill, or political capital to provoke an “all-in” battle along the lines of “no budget, no money” that shuts virtually everything down all at once. A graduated approach of single subject appropriations bills or limited subject CRs that forces the Democrats to own their spending and forces Comrade Obama to provoke a shutdown by his use of a veto if he doesn’t have things his way is the only strategy that I see as workable, and even it is fraught with risk and requires much of that most precious commodity in politics: courage.

It makes no sense to have a ceiling on paying back debts already incurred, but doing things wrong and hoping that you can find some way to make propaganda out of it is normal politics. There’s lots of laws that are wrong.

This is one of them.

But go ahead, tell your congress critter that you want him to get rid of the debt ceiling and focus on controlling the spending he votes for in the first place. They won’t get rid of this albatross because admitting that they were ever wrong would be losing face.

If only he could do that without giving in the urge to throw insults at responsible organizations like the Tea Party Movement, who understand, as I do, why you shred the offer for a new credit card rather than taking it up when you feel you’ve taken on as much debt and credit as you can responsibly handle.

What have you got against people who preach what they practice, Josh?

You could be a person worth listening to, if only you kept your snarkier side in its cage.

The original tea party was a grand grass roots movement (fiscal conservatives and constitutionalists) in which I happened to have been very supportive of in more than one way. The original movement, choosing not to form a central controlling organization and messaging left its self open to infiltration of any number of special interests. The perfect setting for the old Religious Right/Moral Majority movement to move in along with a smathering of other small extremists representations. The RR/MJ’s took over the original tea party movement and to this day continues to be the predominate faction of the tea party. It is those folks who took the origianl tea party recognition and popularity down to what it is today in all the polling. The RR/MJ’s, finding that the nation and much of the traditional GOP had no interest in them once again, cloaked themselves as fiscal conservatives rhetoric. However, in the states in which they gained majority representation (2010) they marched on with their social issues generating nearly 1,100 bills represneting their RR/MJ issues. They went on to divide and decimate the GOP during the 2012 election cycle with their candidates and social issues. They have worked hard for their low acceptance polling across the country and within the GOP traditionalists. It’s a shame, as the origianl tea party movement was a grand one in which so many people, even across party lines was identifying with.

I have noticed, Zeke, that you often say that you have a problem with the Religious Right/Moral Majority. You say it so often that I suspect, in fact, I’d bet good money (even though I disapprove of gambling as a pastime rather than as an inherent and inescapable part of any investment worth pursuing – because I sincerely doubt that I would lose this particular bet) that what you have is a problem with other people believing in their religions and bringing the values in those religions to their political life.

I’ll start with a blanket statement, that I hold to be as Self-Evident as the statement that all Human Beings have the Inalienable Right to Life, Liberty and the Pursuit of Happiness.

A culture that does not value Life is incapable of seeing the Virtues of Fiscal Prudence. People in such a culture do not perceive of a Universe that extends beyond the end of their noses, or of their own lives. The notion that you do not borrow against the earnings of generations not yet born is ridiculous to such people, since they have not qualms whatsoever destroying that next generation before it is born, and often before the their sperm meets the egg of the woman they happen to schtupping tonight, for whatever reason struck their self-centered fancy.

Values matter, Zeke, and Religion, done right helps people live by Good Values. Religion is done right by more people than you can possibly imagine right now because you see Religion with darkened lenses with the words “Religious Right” and “Moral Majority” written on them. These movements which started, as Milton Friedman has noted, only after the Progressives won that Dark Triumph called Roe v. Wade and moves enthusiastically forward to remove Christ from the Creche and even the Cross from public places.

You are blind, Zeke, and blinder still because you refuse to admit that it is you who has rendered yourself blind.

I have NO problems with what you say except for one inference you make!

First Amendment: Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof…

Thats pretty clear and so are the multitude of supreme court rulings over so many decades, to include Roe v Wade and the many new rulings over sexuality rights.

That said, it is the responsibility of every Christian or whatever religious brand they choose, to live their ‘personal’ lives according to whatever religious committment they may choose or have. That is what the constitutional freedom spoken to aside from no congress shall intervene by the making of any laws.

However well or short other individuals may live up to their chosen religions is really not my problem so long as I’m free to practice my religion and live as best I can according to my teachings. The constitution protects that individual right! Beyond the government upholding the constitutions protection for individual religious freedoms or the freedom of no religious beliefs, the government has not right granted to it.

So, you’re right — I don’t believe any religion is for politics or laws being enacted for one religion over another or no relgion — just the EQUAL protection of all individuals freedom of religion or no religion. What I believe or do in my religious life is between me and God — not the government! In my religion everybody is to answer to God — not a government.

“It makes no sense to have a ceiling on paying back debts already incurred,…”

You’re either being deliberately obtuse, reciting a talking point somebody fed you, or you don’t know what you’re talking about. We don’t have a ceiling “debt” already incurred, we have a ceiling on total debt. As I explained above, Congress has authorized/appropriated for expenditures of approximately 140% of anticipated revenue. IIRC, about 6% of authorized expenditures are for debt service. Since there is no revenue to support the expenditures Congress has authorized, the Treasury must borrow the money. The debt ceiling is the total amount the US can owe (well, not really, but that’s another discussion). Failure to increase the limit simply means that all the money Congress has authorized isn’t available, so some things may not be paid at all, some programs may get less money, but the only reason the US would default on any debt is if the Communist in Chief decided not to pay it for his own political reasons and based on his safe assumption that at least 51% of the res publica are stupid enough to believe him.

Kudos Art Chance!! It’s been a while since I’ve so much enjoyed blogging such as yours!
A point: When ObamaCare was passed much ado was made about its costs, and there was lots of horse trading to get the needed one vote majority … and voila a new entitlement was enacted. Presumably, this enactment carried a concurrent cost component and this was made a part of the budget.
To the extent that the real world has mooted the ObamaCare “budget” and more funds are required, this writer presumes that the “additional” obligations (over and above what was agreed) HAVE NOT BEEN AUTHORIZED BY A CONGRESSIONAL VOTE.
I am told that the original 1960 Medicare act projected a cost that turned out ten years later to be 10-fold greater than “budgetted.” Presumably some Continuing Resolution or such lent this over-budget spending to have been “voted on by congress.”
I’d love to see a real accounting of this sort thing. More desirable would be for the house of Respresentatives to REFUSE TO ENACT ANY FURTHER TAX OR SPENDING LEGISLATION until there is a budget per the rules of Congress … and concurrently demand that such budget evidenced a clear path to solvency with actual cuts each of the ensuing years.
BTW: a recent WSJ letter indicated that the supreme court has ruled that arbitrary cecessasion or reduction of a goernment paycheck required by either an employment contract or other enactment is not allowed without a prior congressional enactment.

Appropriations either through the Budget, something we haven’t had in awhile, or by continuing resolutions (CRs) are what authorize spending. Since the US doesn’t have sufficient revenue to support those appropriations, it must borrow money so that it has actual funding up to the amount authorized by the Congress. See, a more detailed explanation in my response to Joshua the Pseudoscholar at the top of the thread.

The fact that the Congress has already authorized this level of spending through CRs is the reason I don’t advocate fighting it out with Comrade Obama over the debt limit. Congress has the power to appropriate, specifically the House, and that is where the fight should be, over appropriations or CRs, not over the debt limit – see above.

And so this is what we call the “perpetual crisis syndrome” in which the
White House, Congress and the Senate revel and delight themselves by constantly
keeping the American people on edge.
The “fiscal cliff”, the up-coming debt ceiling debate and of course the
absurd 23 gun control ‘proposals’ by the president…..surrounded by children…
a very disturbing political ploy, reminiscent of Muslim terrorists, who
consistently use women and children as shields.
But we digress. The point here is that Capitol Hill and the White House will
forever create and use ‘crises’, especially economic ones, to incite worry,
concern and fear-mongering. It’s all a great big ruse to keep us, the American
people, from knowing what is really going on, most of the time behind
closed doors.
The “perpetual crisis syndrome”…that’s what we pay our elected official to do?
Good luck, America.

The Treasury is reponsible for the disbursement of payments to the American public, revenue collection…” The monthly revenue taken in by the government more than covers interest on debt, social security, medicare, medicaid AND the department of defense non discretionary obligations and payroll. All this ‘political’ rhetoric over a government shut down is a game of deceit and will NOT affect payments to non discretionary spending on a month-to-month basis.

It is the congress who has created the fiscal mess by enacting appropriations (largely non discretionary) more than what can be paid for without borrowing. Kind of like an example I heard on TV where you freely spend money using your credit card and then when the bill comes at the end of the month you say, oh, I’m not going to pay for what I just spent. Congress is the place where all the blame needs to be directed!

When Progressives insist on pouring my tax money down that Baby Killing, Eugenics Loving organization called Planned Parenthood, when Barack Obama insists that firms run by people who openly state that their religion does not allow them to pay for birth control (so openly that anyone who wants their employer to do so can just stay away from those companies) … that is also a violation of the Separation of Church and State.

The Church being intermingled with State is just Progressivism now.

So don’t get all angry at the religious Right and Moral Majority for fighting a war that they did not start.

And don’t delude yourself into thinking that all Churches meet in buildings with steeples. The Nazis didn’t, and sought to supplant Christianity. The Communists didn’t either.

When the Liberals gather in front of the radio and say amen when NPR speaks, that is religion.

The Religious Right has every reason to be angry. And you have it wrong. They just wanted to be left alone. Your kind just doesn’t want to leave them alone.

I would ask who it has been who has forced religious social issues before the Supreme Court and constitutionally get their butts kicked on nearly every occasion?

Private sector health insurances have long provided such individual options and constitutionally, I might add! The pending filings by religious churches and organization claiming religious exemption will hinge on the definition of a religious church and individual rights of employees. I won’t presume to know how many churches and claimed religious organizations provided health insurance coverage with the same provisions included, for their employees, leading up the the current rash of objections. However, I think it safe to say, based on my own personal experiences, a significant number did and do — without objections.

There is nothing I supose, that stops any legitimate religious organization from providing health care under the self insured route for their employees so long as, it meets insurance requirements under law. However, without researching, I believe that insurance is required to provide such service coverage as ‘equal protection’ for those who want and use those provisions. That constitutional thing of equal rights and the protection of them for ALL citizens. the government cannot constitutionally write and enact any laws pertaining to any class of religions beliefs or no religious beliefs. it protects EQUALLY, ‘every individual’ citizens right to religious beliefs and practice of them — or no religious beliefs and no practice of any.

On Facebook, search Center for Principled Repudiation. Its manifesto is both an argument for ethically defensible repudiation of illegitimate debt that we do not consent to, and a warning to future lenders and investors not to expect repayment.